The local housing market is like a big game of tug of war between buyers and sellers. Sellers have been controlling the market since 2012 with multiple offers and buyers tripping over themselves to be the winning bidder. As a result, prices have accelerated and reached record levels.However, there is change in the air, and now buyers are beginning to pull back. In the tug of war, sellers are still “winning,” but not if they overprice their homes.Home sellers are no longer getting away with arbitrarily stretching their asking prices. You know what I’m talking about and I’m sure you’ve seen it before. Today’s buyers are approaching housing a bit differently than they did from 2012 through 2017. They are much more cautious these days.The biggest culprits of this caution are interest rates and values. Values have increased significantly. The median sales price was up nearly 6% from April 2017 to April 2018. This follows six solid years of home price appreciation.

It may still be a seller’s market, but buyers are starting to pull back.

At the end of May 2017, interest rates were in the mid to high 3% range. Meanwhile, today we are in the high 4% range with talks of the Federal Reserve increasing them to the low 5% range. With higher values and higher mortgage rates, today’s buyers still want to buy; but, they are getting to the point that they just do not want to pay much more than the most recent relevant sale.
Buyers are approaching housing very carefully and home sellers are wondering what happened to the hot seller’s market that everybody has been talking about for years. Home sellers who are not priced extremely close to their fair market values or do not have a unique selling proposal are not finding success. One of the major indicators that overpricing is spreading can be found in the number of price reductions. Right now, 12% of the active inventory is reducing their asking price every single week.
The bottom line is clear: It may still be a seller’s market, but home sellers must carefully price their homes in order to be successful in this evolving market. In the tug of war between buyers and sellers, buyers are starting to pull back.
If you’d like to know how this information could impact your home sale or your home search or if you just have any questions, give me a call or send me an email today. I’d love to help.